USDA Cuts US Export Projections

As expected, the USDA lowered its projections for US corn exports in the Wednesday Supply and Demand report. Corn exports for 2015-16 are projected at 50 million bushels lower, reflecting the slow pace of sales and shipments to date and higher projected exports for Brazil and Canada. US corn ending stocks are projected 25 million bushels higher at 1,785 million bushels. Soybean supply and use projections for 2015-16 are unchanged from last month. Soybean ending stocks are unchanged at 465 million bushels which, if realized, would be the highest since 2006-07. Soybean oil used for methyl ester is raised 200 million pounds for 2015-16 reflecting the recent Environmental Protection Agency announcement of the biodiesel mandate for 2016. For Wheat, there were no changes made to the US all wheat balance sheet this month. By class, the only changes are a 10 million bushel increase in 2015-16 Hard Red Winter exports that is offset by a 10 million reduction in Hard Red Spring exports. Global wheat supplies for 2015-16 are raised 2.3 million tons primarily on increased production but also higher beginning stocks.

The forecasts for total meat production in 2015 and 2016 are reduced from last month. Beef production is lowered for 2015 due to a slower pace of fed cattle marketings and, consequently, lower steer and heifer slaughter. However, as the pace of marketings is slower, carcass weights are expected to be heavier, providing a slight counterbalance to lower slaughter. Pork production is raised for 2015 on the pace of slaughter in November and early December. No change is made to 2016. USDA will release its Quarterly Hogs and Pigs report on December 23, providing an indication of producers’ hog production intentions into 2016.

Broiler production is lowered for both 2015 and 2016 as hatchery data points to slower growth in broiler production. Egg production is lowered in 2015 based on recent production data, but hatchery data supports a slightly higher production forecast for early 2016. Turkey prices for 2015 are reduced on current prices, but are unchanged for 2016. Egg prices are lowered for the end of 2015 and into early 2016, reflecting recent price movements.

The milk production forecasts for 2015 and 2016 are reduced from last month, as growth in milk per cow in 2015 and 2016 is slowed. Fat basis imports are reduced for 2015 on slower butter imports; on a skim-solids basis, imports are unchanged. No change is made to 2016 imports.